Blair Witch co-director Eduardo Sanchez is back with a new horror film that could scare the pips from your apple. The American filmmaker, who did so much to revolutionise the genre with his found-footage style, uses those camcorder chills in a slightly different way in Lovely Molly: a housebound horror that sets happy newlywed Molly (Gretchen Lodge) on an increasingly nightmarish journey into her past. Even Empire's Kim Newman was impressed, and he don't scare easy. We sent one of our top men down to talk to Sanchez about his frightener and get the low-down on his next project and a possible return to those Blair Witch woods.

Warning: significant spoilers follow.

Why did the title change from Possession to Lovely Molly?There was another movie coming out – I think it still is – called Possession, so we partly changed it because of that. But I actually never really liked that title anyway. It’s a little too generic. We all put our heads together and came up with Lovely Molly, and I think it fits the film better; it’s a little more unique.

Possession is quite a leading title too – the film’s very ambiguous, and a possession isn’t necessarily what’s going on.Yeah, exactly. It really isn’t a possession film. It’s a film about a bunch of things that happen to this girl.

Was it a coincidence that the lyrics to the folk song Lovely Molly seemed so appropriate to the film?It was a total coincidence! The idea of the demon singing to Molly was something that came in during the sound editing process. There was a scene where we felt we wanted to add something more, and we wondered if she could maybe hear singing, and if so, what that song would be. We thought maybe it could be some kind of nursery rhyme that her dad used to sing to her, and Kevin Webb the sound guy just basically had a look around on the web and came back with this old song called Lovely Molly. We read the lyrics and we were like, wow, that’s really strange. We sent it over to Tortoise and they came up with this lovely kind of haunting version of it, and we were hooked!

The music is great all the way through – how did you come to be working with Tortoise?

Even as the writer and director, I still don’t know exactly what happens!

They’re a Chicago-based band. I don’t know how to describe them really: they do kind of jazz, rock stuff. I definitely knew I wanted a kind of organic sound to the music: I didn’t want a conventional score. We had a bunch of temp music in the edit, and they just came back with some very sort of ambient, industrial sounding variations of that. I’m really proud of that soundtrack.

That’s not them performing in the wedding scene is it?Haha, no. That’s my brother-in-law’s band!

The movie starts out looking like it’s going to be found-footage, but it only ends up being partially that. Did you think about doing it entirely found-footage, or with no found-footage at all?
The original idea for the movie was that it would be all found-footage, but it’s always a challenge to try and make it plausible that the characters are continuing to videotape themselves in these crazy circumstances. With Lovely Molly I ultimately decided I wanted to make it feel as realistic as I could, but I felt that found-footage would have limited me in terms of the scenes I could have included. There were a bunch of scenes that I had in my head and loved, that needed to play out in a more genuine way. So we used some found-footage and first-person video when we needed it, but the rest is conventional.

You’re back in your home state of Maryland for this one...This is the first movie I’ve shot in Maryland since Blair Witch, so it was nice to be able to go home at night. I have three kids. I’m in Texas shooting something right now, and it’s tough being alone. As a filmmaker you’re always surrounded by great people, but you still miss your family.

Where did you find your lead actress, Gretchen Lodge?She was a crazy find. It was kind of the same process we went through on Blair Witch. We interviewed a couple of hundred people in New York. She came in and read one of the monologues from the movie for me, and she just blew me away. It was one of those magic moments. You’ve heard the scene at least a dozen times already, and it’s late in the day, and you’re in some office in New York which is about as undramatic as possible, and yet she came in and completely captivated me, with a scene I wrote! You know there’s something special going on when that happens. She was my front-runner as soon as I saw her. A lot of people were interested in the role, and we did some more casting in LA, but I decided to go with Gretchen. It seemed like the right thing to trust her to go where the film needed to go.

Does she understand the story in the same way that you understand it? Did she come to the same conclusions about what’s going on?You know, I never really talked to her about it! For me, even as the writer and director, I don’t know what exactly happens. I think there is a little bit of supernatural stuff, but there are a lot of psychological issues too. I didn’t want to lay anything on Gretchen or give her any answers, and she kind of went in her own direction. We met for a couple of days before filming and got to know each other and talked about the character and her background: the concrete elements of what her life looked like. Otherwise I just trusted her to do her own thing. I just kinda let her go, and she never backed away from anything.

The film’s been playing on the festival circuit for a while: have you come across interpretations of it that have surprised you?

This is one of those topics that you don’t want to get wrong.

Most people seem still to be thinking about it a couple of days later. It takes a little while to process; it’s kind of one of these movies that sort of sinks into you. There have been a few arguments about it. The most curious reaction I’ve encountered so far was when we showed it in Hagerstown, where it was filmed. A young lady in the audience asked where I’d got the information about the molestation aspect of the story. I was really nervous, because it’s a really sensitive subject, obviously, and I respect that people have gone through it and it’s a terrible thing. In the end I just told her that I’ve known some people that it’s happened to, but that I was trying to be honest and give some sort of reason for why Molly is focused on her dad in this way, whether it’s via a demon or her own mind. But this girl said that it had really worked for her, and that she felt it was dealt with very appropriately and sensitively. That’s one of the most pleasing reactions I’ve experienced to the film. It’s one of those topics that you don’t want to get wrong...

What was your thinking behind the creature we glimpse at the end of the film?I wanted it to be something where you see it, but you don’t really see it. Some people take it as proof of the supernatural element being real, but you’re also hearing Molly’s dad’s voice... We’re just seeing what Molly is seeing; we’re in her world at that point.

We had a test screening where she actually just walked into the woods and disappeared, but we realised people wanted to see something. There had been all this possibly-supernatural stuff, and it needed to pay off in some way. We brainstormed a little bit and came up with this demon or creature at the edge of the light, welcoming Molly with open arms, and it worked out really well. The effects company did a really great job on it, and it really stamps the end of the film with something that wasn’t there before.

There a horse motif that runs through the film – why then is the creature at the end more like a wolf?That’s really interesting that you thought you saw a wolf – it is a horse’s head! Did you see it in a theatre?

No, we’ve got a DVD screener with a timecode on it. It’s cool actually. It kinds of adds that vibe you got watching nth-generation VHS copies of horror films when you were a kid.I know exactly what you mean – that illicit quality! It’s just one of those things that you can see clearly in some places and not so clearly in others. It actually has three heads. It has antlers too… We toyed with the idea of how much to actually show, and we judged it by how it would look projected on a screen. I don’t know what it’ll look like on the proper DVD, but I actually kinda like that: I wanted that kind of argument about what you can see. It’s just a kind of amorphous, animalistic head. I think that things that are in the shadows, where your brain has to fill in the gaps… those are the things that make good horror movies. The audience takes itself into a place where it’s scared.

There’s a thread to Lovely Molly about the characters not being able to afford psychiatric help because they don’t have health insurance. That’s a theme that’s been cropping up in a lot of American horror lately: The Haunting In Connecticut is about a family that can’t afford their son’s cancer medication, for example; one of the Saws went after the insurance companies. Why do you think that’s a debate that’s particularly happening in horror?I guess it’s because the whole idea of horror movies is to isolate people, and to me, as a liberal thinking man in the US, I feel that there is this great injustice going on, that we don’t provide healthcare for our citizens. We’re the only industrialised country that doesn’t do that. So there’s a great sense of isolation in that idea that you have nowhere to turn if you’re poor. Lovely Molly is a story about people who are helpless, and don’t have many resources. They don’t even have the resources to take care of their own bodies.

Are horror filmmakers more inherently liberal?I think we’re just inherently poorer! You write what you live... I went through my whole twenties without health insurance, so there is this great fear of losing it or not having it at all.

What are you shooting right now in Texas?It’s a Bigfoot movie called Exists. It’s the first fully found-footage movie I’ve done since Blair Witch, and it’s looking pretty good! I’ve wanted to make a Bigfoot movie since I was a little kid, and I’ve always been curious about the way Bigfoot has kind of turned into a comic character now. For my generation – I’m 43 – Bigfoot was a horrible, really scary creature: this thing lurking in the woods. So I’m trying to bring that back. We’re definitely not making Harry And The Hendersons! We’re putting a trailer together right now, to kind of see what we have, and I think we’re going to deliver something that Bigfoot fans like me have been waiting for for a long time. I’m inclined to say that this might be the one...

Is there a genuine sort of mythological heritage behind Bigfoot? Is this going to be the American Trollhunter?Not quite in that way. Obviously there is a kind of history of the Sasquatch or the Yeti or whatever you want to call it all over the world. I’ve actually written three Bigfoot scripts, and I have an idea for a fourth, so this is planned as the first of four parts, and there is a historical context to the later ones. But this one is just a very simple story: I just wanted to make it as efficient as possible.

And finally, the inevitable question that you must get all the time: Will there ever be another Blair Witch?Hey, we appreciate everybody’s interest: we’re very interested! But look, we’ve been talking to Lionsgate for about three years now... It is progressing slowly, but I really can’t give any details. We’re very anxious to do it, but it’s Lionsgate’s property and we have to follow their marching orders. It’s still out there; it’s a real possibility, but we’re not sure. I can’t say whether it’s going to happen or not...